January 2007

Manufacturing Edge Essential to Defense

January 2007

By Lawrence P. Farrell Jr.

It is hard to envision an industry that provides leading-edge military systems without also being a leader in advanced manufacturing.

While the U.S. defense industry remains unsurpassed, it faces long-term challenges — one of which is its ability to secure innovative manufacturing capabilities. This applies all the way from bombers to boots.

We tend to dismiss the needs of industry on the quite reasonable grounds that commercial enterprise should be subject to the forces of the marketplace. Producers of typewriters were forced by market circumstances to adapt or perish without government intervention. Why should defense industry be any different?

Well, I contend that the defense industrial base is different. Throughout U.S. history, defense manufacturing has played a vital role in national security. In the industrial age, the overlap between industry and national security is significant and unavoidable.

Defense industries cannot be invented on the eve of a national emergency. The day before the 9/11 attacks, Undersecretary of Defense Pete Aldridge warned against peacetime complacency by observing that three of the nation’s last five major wars came as surprises. Just 24 hours later, he had to revise that number to four out of six. The current conflicts in Iraq and Afghanistan once again underscore the importance of keeping a strong defense industry in place, with the ability to adapt quickly to emerging requirements. Witness the truck-armor program and the response to improvised explosives targeting U.S. troops.

In fairness, there is much good news about the state of manufacturing in the United States. Productivity is at an all time high. We are still the world’s largest manufacturer and make 75 percent of what we consume.

But our competitors are close behind. Just like a good running back, we must keep our feet moving.

Manufacturing has proven to be a boon for the economy and for American workers. Wages in this sector are only second to information services. Seventy percent of workers receive health coverage. Each dollar invested in manufacturing returns $1.37 to the economy. By comparison, one dollar invested in government returns only 73 cents.

But the defense sector must contend with several unwelcome developments, such as the prospect of declining military spending and pressures to cut the mounting cost of weapon systems. As the industry seeks ways to cut costs, manufacturing deserves close attention. Even relatively small investments in manufacturing processes can save millions of dollars in weapon costs.

Earlier this year, a Defense Science Board study on the Pentagon’s “ManTech” program suggested the value of manufacturing technology is not widely understood. The DSB recommended an effort to institutionalize the importance of manufacturing, beginning with the development and publication of a strategic plan and investment strategy.

Among the organizations that are actively engaged in developing advanced manufacturing processes is the non-profit National Center for Defense Manufacturing and Machining in Latrobe, Pa. Its mission is to advance the use of state-of-the-art manufacturing by U.S. defense suppliers. (By way of disclosure, I should mention that I serve on the NCDMM board of directors.)

It may come as no surprise that in the information age, the Internet will play an increasing role in advanced manufacturing. The Internet enables the distribution of digital models so that a manufacturer can make products anywhere in the world. Digital distribution makes possible alternate manufacturing techniques, such as rapid prototyping, free-form fabrication, layered manufacturing and 3-D printing. Thanks partly to government support, the United States currently has a significant advantage in these technologies.

Meanwhile, a tough reality facing U.S. industry is the declining pool of experienced manufacturing engineers and machinists. When asked what his top three challenges were, a defense manufacturer responded: “people, people and people.” His lament was echoed by the results of a recent National Association of Manufacturers survey, which found that 90 percent of 815 respondents suffered moderate to severe shortages of skilled workers.

The Defense Science Board also addressed deficiencies in work force expertise, citing diminishing in-house manufacturing expertise in the Defense Department and the services.

In response to this challenge, NDIA has been encouraging its member companies to support programs that persuade students to engage in science and technology endeavors.

I was struck recently during a visit to the international machine tool show in Chicago by just how high tech manufacturing has become, and I pondered how this image can be projected across America. It is a question that we should all be pondering.

Most manufacturing now is done by small and medium-sized enterprises. Too frequently, these smaller manufacturers lack the resources to invest in research and development. Nevertheless, small businesses provide most private-sector jobs in this country.

There is a compelling case to be made that both the federal government and the private sector need to step up their investments in manufacturing technology, so we can stay on par with countries such as Japan, Germany and China, which is poised to become the world’s manufacturing powerhouse of the 21st century. Although much manufacturing is being outsourced, the United States is a leader in advanced manufacturing, and that is where more investment is required.

Government programs designed to fund advances in U.S. manufacturing technology — ManTech, the Advanced Technology Program and the Manufacturing Extension Program — are helpful, but their budgets have been shrinking.

I would urge Defense Department and industry leaders to jointly develop long-term investment plans that will ensure the nation maintains its current advantage as a manufacturing and military power. Secondly, I urge the adoption of a separate budget line item for manufacturing investment in technologies not necessarily associated with specific programs. Finally, I urge significant, continuing support by the government. Policy by itself is insufficient; resource support is the essential piece.